{"id":94815,"date":"2024-09-25T19:46:53","date_gmt":"2024-09-25T23:46:53","guid":{"rendered":"https:\/\/coinscreed.com\/staging\/?p=94815"},"modified":"2024-09-25T19:48:49","modified_gmt":"2024-09-25T23:48:49","slug":"ledn-financial-institutions-explore-bitcoin-backed-lending","status":"publish","type":"post","link":"https:\/\/coinscreed.com\/staging\/ledn-financial-institutions-explore-bitcoin-backed-lending\/","title":{"rendered":"Ledn: Financial Institutions Explore Bitcoin-Backed Lending"},"content":{"rendered":"\n

Lower interest rates and increasing crypto adoption<\/a>\u00a0are encouraging more financial institutions to embrace Bitcoin-backed lending.<\/p>\n\n\n\n

\"Ledn:<\/figure>\n\n\n\n

Financial institutions are increasingly entering the Bitcoin-backed lending space as Bitcoin adoption continues to grow among investment managers, while fiat interest rates become more restrictive, according to a statement by Bitcoin-backed lending platform Ledn to Cointelegraph on Sept. 25.<\/p>\n\n\n\n

Institutional investors have invested billions into spot Bitcoin exchange-traded funds (ETFs) following approval by U.S. regulators for trading in January. Ledn noted that \u201c[M]ajor institutions are now going beyond ETFs to focus on Bitcoin-backed lending.\u201d<\/p>\n\n\n\n

Ledn revealed that it processed $1.16 billion in cryptocurrency loans during the first half of 2024, primarily for financial institutions. <\/p>\n\n\n\n

\"Ledn:
Ledn offers several cryptocurrency lending products. Source: Ledn<\/em><\/figcaption><\/figure>\n\n\n\n

These lenders typically earn over 10% annual returns (APR). Borrowers face interest rates between 11.4% and 13.4%, depending on the loan type, according to Ledn\u2019s website.<\/p>\n\n\n\n

Ledn\u2019s model involves lending out Bitcoin collateral to generate additional yield, though this introduces credit risk for borrowers, the company explained on its site.<\/p>\n\n\n\n

On Sept. 18, the U.S. central bank reduced interest rates on short-term Dollar deposits from around 5.3% to 4.8%, according to the Federal Reserve Bank of New York\r\n \r\n \r\n \r\n <\/g>\r\n \r\n \r\n \r\n <\/clipPath>\r\n <\/defs><\/svg><\/span><\/a>.<\/p>\n\n\n\n

Bitcoin-backed loans are denominated in fiat currency and secured with Bitcoin, which the borrower forfeits if the loan is not repaid. <\/p>\n\n\n\n

The market for Bitcoin-backed loans is currently valued at approximately $8.5 billion and is expected to grow to $45 billion by 2030, according to market researcher HFT Market Intelligence.<\/p>\n\n\n\n

Ledn competes with other Bitcoin platforms such as Arch and Salt and will soon face competition from established financial firms like Cantor Fitzgerald<\/use><\/svg><\/span><\/a>, which announced plans to launch its own institutional Bitcoin financing platform in July.<\/p>\n\n\n\n

Ledn also indirectly competes with decentralized finance (DeFi) lending platforms like Aave. The Bitcoin-backed lending market has benefited from the increasing number of regulated U.S. cryptocurrency custodians that hold Bitcoin on behalf of investors.<\/p>\n\n\n\n

In August, Cointelegraph reported that Fireblocks, known for its self-custody treasury management tools, received approval from New York\u2019s financial regulator to provide asset custody services for U.S. clients. <\/p>\n\n\n\n

Other major institutional crypto companies, including Coinbase Custody Trust, Fidelity Digital Asset Services, and PayPal Digital<\/a>, also hold similar licenses.<\/p>\n","protected":false},"excerpt":{"rendered":"

Lower interest rates and increasing crypto adoption\u00a0are encouraging more financial institutions to embrace Bitcoin-backed lending. Financial institutions are increasingly entering the Bitcoin-backed lending space as Bitcoin adoption continues to grow among investment managers, while fiat interest rates become more restrictive, according to a statement by Bitcoin-backed lending platform Ledn to Cointelegraph on Sept. 25. Institutional […]<\/p>\n","protected":false},"author":56,"featured_media":94823,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[12094,152,1613,710,197,12424,1502],"class_list":["post-94815","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-adoption-2","tag-bitcoin","tag-bitcoin-etf","tag-business","tag-defi","tag-lending","tag-regulation"],"jetpack_featured_media_url":"https:\/\/coinscreed.com\/staging\/wp-content\/uploads\/2024\/09\/Ledn-Financial-Institutions-Explore-Bitcoin-Backed-Lending.webp","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts\/94815","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/users\/56"}],"replies":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/comments?post=94815"}],"version-history":[{"count":0,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts\/94815\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/media\/94823"}],"wp:attachment":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/media?parent=94815"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/categories?post=94815"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/tags?post=94815"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}